Monday, May 23, 2011

Way back in March 2009 I posted "Why do democrats hate black kids?" It was about the rejection of vouchers by the democrats and the teachers unions (which nationally are dominated by black democrats). I wrote then that I was disappointed in President Obama's signing a bill offered by Dick Durbin (D-IL) that eliminated vouchers for DC children. "It has been demonstrated again and again that vouchers work. Yet they are rejected by the democrats and the teachers' unions. The educational system clearly doesn't work. Urban black kids are not dumb. Any kid who knows the lyrics of some rap song after only two hearings could learn Tolstoy if there were a War and Peace rap. I have suggested in the past that we take the money currently being spent per student and contract education out to the Catholic church or to private schools. Black urban education is a national disgrace. Any black leader who ignores the problem is not a leader and should be dismissed out of hand - and this includes Barack Obama." The Republicans rode to the rescue when it came time for the budget compromise. The Republicans indicated that they would not sign any budget compromise that did not include voucher funding. The bill passed over the objections of many leading democrats who are more beholding to protecting the teachers' unions than they are to black kids. It remains a mystery to me that black still vote democratic in the face of the obvious disregard by the democrats for the education of their children. Well the state of Tennessee can add republican business lobbies to the democratic politicians. A bill introduced in the state legislature to introduce vouchers failed to pass. Not surprising the usual democratic suspects were against it (black democratic politicians and teachers unions). But joined with them in opposition were the Chambers of Commerce in Knoxville, Nashville and Chattanooga. This may be a first. In a state where the academic performance of black urban kids in Memphis is an embarrassment to all citizens, the legislature has rejected an approach that has always demonstrated success. Yes I know that the report on the DC program cannot find any difference in student in-school achievement but 82 percent of the students in the program graduate as compared to 70 percent that are not in the program. Also the schools that have voucher students are found to be safer than the other schools where maintaining order is a major undertaking. Shame on Tennessee. Shame on the Chambers.

Sunday, May 22, 2011

One of the most offensive political ads I have ever seen is the one with the man pushing an elderly woman in a wheelchair over a cliff. It is intended to depict the Ryan plan on medicare as pushing old folks over a cliff. I wish the republicans would counter with an ad showing the democrats pushing the country over a cliff. The difficulty with the Ryan plan is that is something new and requires the public to be educated and rational in its decision-making. Thus it has very long odds before it. That we are intellectually lazy comes as no surprise to an ex-professor constantly exasperated by students who will not take two seconds to Google what they do not know. No matter that the Ryan plan does not apply to those 55 and older, the dems will argue that it pushes over the cliff those under 55. No matter that it tackles the main threat to our economic prosperity – the $38 trillion hole that medicare puts us in if remaining unchecked. Instead of the democrats proposing how they would solve the problem, instead they gleefully attack the Ryan plan – using Newt Gingrich’s words on “right wing social engineering”. But what is right wing engineering is actually pointing the federal government in the direction of the market – a radical (to some) idea that is perceived to impose ill on the masses. It may seem curious that one of the basic foundations of America – the market – is being assailed. However, it is consistent with the left’s notion of “fair”. It is asserted that the market is not fair – denying those who “need” stuff who are lacking in resources. It is somehow “fairer” to have those decisions made by the state, which of course imposes the tastes and preferences of those in the government upon. What is “fair” about that? The left assumes that people left to their own devices make poor choices – that is choices different than the leftist critic looking down his nose. What people do is to make choices based on their own tastes and preferences and income constraints. So if a person chooses to buy wine instead of milk, to eat at McDonald’s instead of at Whole Foods, then the market is somehow at fault and should be replaced by the nanny state. Given all this, it made perfectly good sense to me that Goodwin Liu, the leftist Berkeley law professor who was denied a place on the federal bench by a republican filibuster has written that free enterprise, private property and limited government are code words “for an ideological agenda hostile to environmental, workplace and consumer protections”. Huh? Say that again? It makes perfectly good sense to deny a federal judgeship to any person who believes the very foundations of this country are somehow antithetical human well-being. Although professors have little impact and reach beyond the few who already believe what they believe, putting them in positions like the federal bench where they can inflict real damage on society is another matter. The real question is why in the world was he nominated in the first place?

As I have written before on these pages (“Say it isn’t so Newt”), I am disappointed with the former Speaker. First it was his embrace of ethanol subsidies – probably in his mind a requirement for doing well in Iowa. Second, it was his commercial with Nancy Pelosi (how could anyone much less a conservative even stand that woman is beyond me). Now comes his trashing of Paul Ryan and his medicare plan. Of course he recanted but the job is done providing fodder for the democratic scare machine. You would think that someone of Newt’s political experience and intellect would know better. I find it hard to imagine that he doesn’t. What is particularly disappointing is that I greatly admire Newt’s intellect. His wide ranging discussions on virtually any topic are sprinkled with insights and show serious thought. His alternative Civil War novels with the esteemed Bill Fortschen are wonderful. A friend of mine who is also a Civil War buff said that the depictions of Gettysburg were so vivid that he swore he could spell gunpowder. I did not like the World War II Pacific theater ones as much – which is interesting since like the Civil War there is so written that it his hard to produce something fresh. My favorites are William Manchester’s Goodbye Darkest and Herman Wouk’s Winds of War and War and Rememberance. However, although I did like the way Gingrich and Fortschen handled Valley Forge straight up with few if any flights of fancy, it was not the prose that stirs one’s soul. Maybe its because Fortschen’s expertise is the Civil War. So given my admiration for Newt, I have found it curious that he would be so maddenly inconsistent in his public pronouncements. Surely, he should know that calling Ryan’s plan “right wing social engineering” would mortally wound him among most Republicans. Moreover, he should also know that the Republicans who voted for the Ryan budget would have to fend off Newt’s words in the coming election. All in all he has created a distraction that should have been avoided. The cynics have said that he was not a serious candidate for the presidency and his comments were intended to land him a cush position at some think tank. Say it isn’t so Newt.

Sunday, May 15, 2011

I listen to little talk radio and its usually when I am driving somewhere. I can't talk too much of the puffery of Rush Limbaugh although I have heard him say a few insightful things. Yet he remains a one trick pony with regards to subprime mortgages, the impact of CRA on banker's lending decisions and simply ignores evidence to the contrary. Sean Hannity keeps saying the same things over and over and gives his guests no time to answer questions. Unlike Limbaugh, Hannity is rude to liberal callers. I can't listen to Glenn Beck either or the myriad of lesser knowns like Mike Church, Mark Levin and Michael Savage. I do like Bill Bennett and it is truly a shame that SiriusXM replaced him with the caustic Church. Andrew Wilkow is one of the few who understands markets and his discussions involving supply and demand are textbook and informative. However, on other matters there is little to differentiate him from the others. One of the areas where many of the hosts (save Bennett and sometimes Wilkow) err is in their view of liberal professors. Apparently they are John Locke extremists believing that the students mind are blank tablets when they arrive at the university. These "minds full of mush" then get shaped and influenced by liberal leftist one-world-statist professors. Really? Since when did young people pay any attention to adults? Why do you think that the university students are any exception? I have taught at universities for 40 years including the uberliberal American, Howard Universities and Macalester College. There are those like the late Jesse Helms who considered another of my universities (University of North Carolina at Chapel Hill) to be a hot bed of communism. If Helms though that he was a fool but even if he didn't he used it to get elected to the US Senate much like many of his southern predecessors used the "N" word to get elected. Now the truth is that at all those universities, the students were considerably more conservative than the faculty. It is remarkable given they have been mostly taught by liberals from pre-K to college and have been indoctrinated by the liberal press and more liberal "culture". In my 40 or so years, I have generally been the most conservative faculty. I hear stories of how black conservatives are vilified. I don't know of an instance in which I have been vilified at the university. And if I have it certainly has not affected my career. I also hear stories on talk radio of how conservative students suffer at the hands of liberal professors. It that is true, I have never heard of such an instance within the university. I have never had a student tell me of a single case of being punished for not parroting a professor's political views. I am also amused by charges by most of talk radio of how liberal professors are indoctrinating our youth. That is garbage. The students who listen to the side bars not associated with the course are the ones who agree in the first place. The others tune out. Personally I could care less what a professor's political views are. What I care about is scholarship. I would rather have a serious scholar as a colleague with different views than a fool that agrees with me. If we mistakenly have a fool on the faculty then hopefully that person will not get tenure and promoted. I had a professor at Georgia who once told me that bad teachers did not hurt good students and bad teachers could not hurt bad students but good teachers helped good students be better students. If that good teacher happened to be liberal then why should we care?

Thursday, May 5, 2011

Without overstating the obvious, the upcoming battle over the budget is a defining moment in the history of the republic.

Both the Paul Ryan budget plan and President Barack Obama's budget envision a different America. The Ryan budget, which has no chance of becoming law in this Congress, projects lower deficits with government spending at 20 percent of gross domestic product while the president's budget projects lower deficits with government spending at 24 percent of GDP.

The one that provides the framework of what becomes law will have far-reaching effects. Ryan envisions a future that reshapes entitlements. The Medicare proposal shifts the problem of cost containment to the market and to the states via block grants. The president's vision is to continue the status quo with decision-making in the hands of boards housed in Washington.

Although one would be hard pressed to show that government bureaucracies can successfully contain costs, such proponents are hardly swayed by evidence to the contrary. What has been interesting is that the president rejected the recommendations of his own debt reduction committee in toto and has offered up a budget that locks in higher spending levels and higher taxes.

His attack on the Ryan budget was stunning in its vitriol. It showed the president as an ideologue and left little ground for compromise. This president is no Bill Clinton, who signed into law NAFTA and welfare reform, nor a Ronald Reagan, who compromised on the implementation date of tax cuts and on Social Security.

Yet without compromise, the country will be in the familiar territory of continuing resolutions with no budget. Without compromise, there will be no raising of the debt ceiling. Yet there should be no compromise on raising the level of government spending to 24 percent of GDP. Traditionally this level is below 19 percent and 19 percent is an important number.

Obama may think he can get government revenues up to 24 percent to balance his budget, but he ignores the evidence of history.

As I have pointed out before in this space and as Alan Reynolds recently wrote in the Wall Street Journal, all the fiddling around with taxes and tax rates does not change the percent received by Washington. It is 19 percent. The only difference is that GDP falls when tax rates go up and GDP rises when tax rates go down.

A hike in taxes to achieve 24 percent will lower GDP and make us all worse off. Here Republicans must draw a line in the sand. They should approve no budgets with spending and taxes in excess of 20 percent of GDP. It is interesting that some have called Barack Obama the worst president in history. While that is debatable, there should be little debate that he is one of the most important presidents in history. There are few presidents who alter history. Abraham Lincoln was one and Barack Obama is another. And just like the election of 1860, the one coming in 2012 will define the future of the country.

Dr. Harold Black is the James F. Smith Jr. Professor of Finance at the University of Tennessee. He can be reached at hblack@utk.edu.

About Me

Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com